Leading personal injury law firm
The major car insurance companies are making huge profits that they could use to reduce premiums for drivers, according to an analysis of their latest accounts by Thompsons Solicitors, published online today (Monday 20 May) to coincide with a House of Commons Transport Select Committee hearing on the cost of motor insurance.
The leading personal injury law firm has examined the latest published financial information of the top five car insurers and found all of them increased their profits in 2012 – contrary to the impression they give of being victims of mass fraud claims and losing money.
Making it as hard as possible for people to make genuine claims
“Law firms are constantly accused of being ‘ambulance chasers’ by insurers and yet they have a vested interest in creating a sense of crisis and making it as hard as possible for people to make genuine claims,” said Tom Jones, Head of Policy and Public Affairs at Thompsons.
“The facts show the car insurance companies are making big and growing profits, and they are putting paying dividends to their shareholders ahead of reducing premiums. One major car insurer is making a £245m dividend payment for 2012, which could have funded an £81 premium reduction for each and every one of its three million customers.
“We accept a business is entitled to make a profit, but we believe it is unacceptable for us all to be running scared and for those who benefit from a captive market to heavily influence public policy.”
Thompsons Solicitors refuses to work for insurance companies
Thompsons Solicitors, which refuses to work for insurance companies, says the figures demonstrate the insurance industry has much to gain from Government reforms that undermine access to justice for genuine claimants.
The key findings of the Thompsons analysis are:
- Market leader Direct Line, which owns the Churchill brand, saw profits from car insurance rise last year to £262m (2011: £255m). It will be paying £101m in dividends to shareholders on June 11 – equivalent to £25 per policy holder.
- Admiral made a profit from the UK car insurance market of £372.8m in 2012 - a 19% increase on the previous year. Its UK car insurance profits were actually higher than Admiral’s overall profit, due to losses in overseas markets. Admiral increased its total dividend pay-out to shareholders by 20% to £245m – equivalent to £81 per customer.
- AVIVA does not give a separate profit figure for car insurance, but its 2012 annual report says: “Personal motor premiums increased by 3% to £1,164 million (2011 £1,126m) and we have nearly 2.5 million personal motor customers, an increase of over 250,000 since the start of 2012. We continue to deliver good profitability in personal (motor insurance) lines.”
- AXA UK & Ireland, part of global French-owned group, does not publish separate accounts, but it issued a statement on 21 February saying: “Motor profitability improved in 2012, thanks to pricing and risk selection actions.” It said it expects ‘improved results in 2013’. AXA has been particularly active in lobbying the Government for reforms to deter claims.
- Liverpool Victoria, the fifth largest car insurer, saw its profits rise 11% in 2012 to £29.5 (2011: £26.5m).
“The Transport Select Committee will be hearing representatives of the car insurance industry today arguing for more measures that would undermine access to justice for genuine claimants.
Insurance companies are about maximising profits
“They will present themselves as objective and concerned about motorists when in fact insurance companies are about maximising profits and do that by paying out as little as possible and charging as much as they can in premiums.
“It is absurd to suggest insurers are on the side of the motorist any more than big oil companies are. They are stirring up a debate about whiplash claims to divert attention from how much they profit from motorists. And they are being hypocritical because they have fuelled whiplash claims themselves by making millions* selling cases to law firms and cold calling accident victims to get them to settle cases cheaply.
“Thompsons has never and will never work for insurance companies and will only represent the injured and mistreated.”
Thompsons made a written submission to the Transport Select Committee calling for action that would stop the merry-go-round of referrals between the insurance industry, claims management companies and some lawyers. This included a ban on ‘third party capture’ and credit hire agreements and the outlawing of claim texts, ‘robocalls’ and cold calling.
* In 2012, Direct Line’s revenue from charging referral fees to solicitors was £17.2m.
Putting a stop to hypocrisy within the insurance industry
Thompsons is challenging the insurance industry about the hypocritical arguments it makes about fraudulent claims and the negative effect this is having on injured people and victims of road accidents.
We urge you to contact your MP about this issue. Go to http://findyourmp.parliament.uk/ to find out who your local MP is.
Injured on the roads? Help and compensation is close at hand.
If you’ve been injured on the roads in the last three years, Thompsons Solicitors' expert road traffic accident solicitors can support you with making a road traffic compensation claim.
Whether you were the driver or passenger in a car, lorry, coach, van, bus, truck, on public transport or were injured as a pedestrian or cyclist, you may be able to claim for damages.
If you have suffered injuries such as whiplash, bruising or a more serious injury following a road traffic collision on the motorway, country lane or city roads, our solicitors across the UK are ready to help you to make a claim and access any rehabilitation you require.
Unlike other firms, Thompsons only ever acts for the injured person – never for insurance companies. This means we will fight harder to secure the maximum level of compensation for your injuries, and don’t need to please motor insurance paymasters.
Contact us today for a free, no obligation assessment of whether you have a claim for compensation following a road accident.
For further information, visit our How to Make A Compensation Claim page.